Vitalik Buterin Says ETH’s Value Goes Beyond Fee Burns
Vitalik Buterin says ETH’s store-of-value case rests on Ethereum’s resilience, privacy and decentralization. He supports keeping EIP-1559 and its fee burn.
Key Notes
- Buterin says ETH’s store-of-value case should rest on Ethereum’s resilience, privacy and decentralization.
- He supports retaining EIP-1559 and its fee burn even if burning remains low.
- Maximizing fee revenue could price out users and encourage more centralized governance.
Ethereum co-founder Vitalik Buterin is urging investors and developers to judge ETH primarily as a store of value, with its case resting on the network’s durability, security, and independence. Fee burning should remain part of Ethereum, he said, but maximizing it should not drive the blockchain’s development.
In a November 8 X thread, Buterin argued that holders should not be discouraged even if burning remains below “10% of breakeven” indefinitely. His reasoning centers on whether Ethereum can remain useful and dependable through technological disruption, including advances in artificial intelligence.
Why Fee Burning Does Not Guarantee a Price Floor
Buterin challenged the idea that the value of burned transaction fees provides a reliable minimum valuation for ETH. In his valuation example, a hypothetical token with $1 billion in stable annual burns and a 4% discount rate would appear to support a $25 billion valuation.
The weakness is the assumption of stable demand. Much of Ethereum’s fee activity during the 2021–2023 period depended on the crypto economy itself, he said. If ETH’s price fell sharply, users would have less purchasing power and the fees they could afford would also decline. The supposed valuation floor could fall alongside the asset.
Tokenized real-world assets offer a stronger connection to economic activity outside crypto, Buterin argued. Still, a mature financial business is unlikely to reproduce the extraordinary fee spikes of speculative NFT trading.
The Cost of Chasing Higher Fees
In a follow-up post, Buterin warned that treating Ethereum like a corporation built to maximize fee revenue could require substantial spending and increasingly interventionist governance. Those pressures would sit uneasily with decentralization and resistance to capture.
Higher gas prices can also exclude users who need privacy and security most. His preferred objective is to accommodate more activity within safe resource limits, rather than choose the price that produces the most revenue.
Resilience as the Foundation of ETH’s Value
Buterin’s alternative framework emphasizes censorship and capture resistance, open source, privacy and security. For an asset intended to preserve value, the first requirement is “To survive.”
That directs attention toward conservative cryptography, safer custody, private payments, reliable transaction inclusion and infrastructure users can operate independently. It connects with Ethereum’s post-quantum roadmap and Buterin’s recent digital minimalism argument about reducing dependence on potentially compromised websites.
He also sees room for adoption: assets issued directly on Ethereum can make ETH more useful as collateral and easier to exchange for other assets. The distinction is the goal guiding that growth.
EIP-1559 and the Burn Stay
Buterin explicitly supports retaining EIP-1559, including its burn. Under the fee mechanism, Ethereum destroys the base transaction fee. Separately, validators receive newly issued ETH for securing the network.
Ethereum’s issuance documentation explains that the balance between creation and burning determines whether supply expands or contracts. Buterin’s thesis does not require continuous supply contraction. It is an argument about long-term value, rather than an adopted protocol change or a promise of price stability.
Disclaimer: CoinScreamer is an independent media brand owned and operated by NuvexMedia LLC, publishing news, research, and market insights on digital assets and related technologies. NuvexMedia LLC invests in and collaborates with companies across the digital asset, blockchain, and technology sectors. These relationships do not influence CoinScreamer’s editorial coverage, and the publication maintains full editorial independence to provide accurate, timely, and objective information. © 2025 NuvexMedia LLC. All rights reserved. This content is for informational purposes only and should not be considered legal, tax, investment, financial, or other professional advice.
